Partnership act
E. Venugopal
(Querist) 27 April 2012
This query is : Resolved
hi sirs, my question is there was a partnership firm consisting four members, two of them wanted to retire and their share was fixed and the other two existing partners wanted to pay the amount to the retiring partners and given their personal post dated cheques on the condition that the outgoing partners should come and sign before registrar of firms with regard to retirement. The outgoing partner did not come to registrar of firms as agreed, but filed case against the existing two partners for NI Act. Is it permissible and whether they can file NI Act cases, because as per agreement they wanted to retire but legally they have not retired. Please give any citations and suggestions.
Adv.R.P.Chugh
(Expert) 27 April 2012
I am treading in unknown waters as 138 is definately not my forte. But Ld.Seniors would bear me out on this if i go awry.
You have failed to apprise us but which comes out naturally is that the continuing partners then went on to stop the payment of the cheque. We all know that 138 is only made out when the cheque is in discharge of liability.
In my view Mr.Venugopal, This is a case of reciprocal promises, the continuing partners promising to give a certain amount as the share of retiring partners, who in turn, promise to come and complete the retirement formalities before the registrar. (S.54 ICA)
To negative their liability vis-a-vis the retiring partners (which in turn would negative 138) They can say in their defence that since the partners (retiring) did not perform their promise, the question of reciprocal promise of payment of share does not arise. No obligation no liability.
Suhail A.Siddiqui
(Expert) 27 April 2012
It is N.I. Act section 138 matter which is only restrict for cheque bounce/ dishonored. you mat move court for partition of partnership and then take all these plea.
C. P. CHUGH
(Expert) 27 April 2012
What is gathered from your statement the cheques were issued by continuing partners to retiring parners in consideration of retiring partners capital as appearing in the books of accounts of partnership firm. Please clarify whether any deed of dissolution has been executed and signed by both retiring and continuing parnters and whether it has been mentioned in the dissolution deed that the cheques and question are issued against said consideration. If it so, it would be difficult for you to escape from the liability under NI Act.Whether or not they have appeared before the Registrar of Firms is irrelevant if they have executed and witnessed the Dissolution Deed. To get the records set right is the duty of continuing partners and is not a liability of the retiring partners.
prabhakar singh
(Expert) 29 April 2012
Suhail A.Siddiqui Sir!
partnerships are not granted relief of "partition".
"dissolution and winding up" are the remedies.
prabhakar singh
(Expert) 29 April 2012
In my opinion the query is adequately addressed by Mr.Bharat Chug and Mr. Venugopal has his answer in his query it self as he says" because as per agreement they wanted to retire but legally they have not retired. "
But if there is any dissolution deed executed and signed between partners after accounting done then position would be as stated by Mr.C.P. CHUG.
